Thread: Did you contact your MP? Post their response here

I emailed my MP the other day and got his response this morning. Very positive I think.

Thank you for your e-mail.

I have already signed the following Early Day Motion relating to the issue:
EDM 2227 DEFAULT BANKING CHARGES 22.05.2006

That this House notes with concern the exorbitant costs to customers of default charges applied to current and credit card accounts, which cause distress and alarm to consumers, and in particular to the financially vulnerable; welcomes the statement by the Office of Fair Trading (OFT) that a default charge should only be used to recover certain limited administrative costs; recognises the work by Which? to challenge excessive bank charges; commends the thousands of consumers who have challenged these default charges with their providers, many using the free information made available from Which?; and calls on current account and credit card providers to respond positively to OFT's statement.

I will also write to Ministers about this.

Regards

Paul Truswell

I received a reply from my MP, Mr Alan Meale, today.

He has forwarded my letter to 'Rt Hon Gordon Brown MP'.

'We' are awaiting Mr Brown's reply.

No reply from Alisatir Darling, aprt from the usual auto reply. 19 days what a git.

Just had a response from Maria Miller.

OMG what planet is this woman on?

She states:

"Although these charges might be considered unfair, I think that the banks do need to make a charge .... I also believe that bank charges can act as an incentive for people to manage their finances responsibly, which is very important in the current climate of rising personal debt."

She is forwarding my correspondence to Alistair Darling and will write a reply again once she has received a response.

The other day I received copies of letters sent to Ed Balls MP (Economic Secretary) and Ian McCartney MP (Minister of State) by my MP, Paul Truswell. Is he prompt, or what? Wonder if I'll hear anything from these other two though...

BANK CHARGES

As you will be aware, the Office of Fair Trading recently found the current level of charges applied by UK high street banks to be excessive and that a cap should be imposed. The OFT also ruled that penalty charges are illegal under the 1999 Unfair Terms in Consumer Contracts Regulations.

You will also be aware that, despite these facts, banks continue to apply excessive charges and most customers do not question their legality. As someone who takes a very keen interest in consumer affairs issues and as a signatory of EDM 2227 this, the fact that banks are making around £3 billion a year from excessive illegal charges, concerns me deeply.

Please find enclosed an email I received from a constituent, who shares my aversion to these excessive charges. I would be very grateful if you could respond to the specific points she raises. I look forward to hearing from you.

Hi all...in follow up to my last post...
My MP wrote to Ed Balls MP Economic Secretary to the Treasury, raising my concerns. This is the responce he got back....

Ed Balls MP
HM Treasury
1 Horse Guard Road
London
SW1A 2HQ

Tony Wright MP
20 Church plain
Great Yarmouth
Norfolk
NR30 1NE

16/09/06

Dear Tony

Thank you for your letter of 1 August enclosing correspondence from your constituent XXXX about bank charges. I am replying as I have Ministerial responsibility for heis policy area.

I am sorry to hear XXXX’s concerns about bank charges.

The setting of charges and their application is a commercial decision for each individual bank. However, it is clearly important to customers and businesses are aware of the charges they face. The Banking Code sets standards of good banking practice for the banks and is the subject of independent review.

The banking Code requires that signatories give their customers details of any charges for the day-to-day running of their accounts when they open it, that they inform their customers personally if they increase any of these charges or introduce a new charge and sets notice periods before changes are made to terms and conditions. The signatories are also required to tell customers the charge for any other service or product before they provide that service or product, and at any time the customer asks.

With regard to the terms and conditions that set out these default charges, your constituent may be aware that the Office of Fair Trading (OFT) has been investigating credit card default charges. As a result of this investigation, the OFT wrote to leading banks in 2005 and argued that the bank’s credit card default charges were excessive, challenging the fairness based on existing rules set out in the “Unfair Terms in Consumer Contracts Regulations 1999”. The OFT have recently issued a further statement, setting out their views. The OFT recognize that there is a read across from credit cards to other default charges in consumer contracts such as bank overdrafts and mortgages.

The OFT statement also contains immediate advice for consumers. It makes the position clear. In particular that while the OFT have set out their views that does not have the force of a court decision. Customers contemplating legal action need to take their own legal advice.

In addition, all banks in the UK are required to follow prescribed complaints procedures for their customers. Unsatisfied customers are able to make a formal complaint to the bank concerned.

Please pass on my thanks to XXXX for taking the trouble to make me aware of these concerns.

Yours sincerely

Ed Balls MP

Ok...not sure what to make of it....i'll leave it to you guys...

I have a reply back from Gordon Brown's office, from a Miss C Vasili (Correspondence and Enquiry Unit). She believes the issues raised are the responsibility of the Department of Trade and Industry, so she's sent the letter to Alistair Darling... I'm sure I've heard that name before... Anyone else had dealings with Mr Darling?

Mr Darling is my MP and I recieved a "I have received your letter" nothing else since.

Got this reply from My MP this morning,

5th October 2006

Dear Mr Reid

Penalty charges issued by high street banks

Thank you for your e-mail to me about the above issue. I have to admit that the evidence provided by the two websites you recommended along with some other information I picked up from Citizens advice is very persuasive. In addition I am aware that the Office of Fair Trading (OFT) has recently announced that in their opinion excess charges (someting they loosely define as an amount more than £12) on credit cards are unlawful.

If the OFT are willing to pronounce on the credit card charges they probably will be on bank charges also. However, even if they do make an announcement or a policy recommendation on these issues they can only express an opinion and cannot lay down the law. I imagine that as you say, the common law will be enough to rule out the banks high charges. However, I am not sure that these cases will ever reach the courts and this is the real problem.

During my first year in parliment I was a strong campainger against cash machine charges and have fought hard to get a better labelling of these and also more fee free ATM's. I see this issue in much the same way. After all ATM charges most effect the poorest in our society much like these excessive bank charges do. Not only are the poorest most likely to slip into their overdrafts, in addition the fees make up a bigger proportion of their income.

I share your concern about these and have taken this opportunity to write to Alistair Darling, the Secretary of State for Trade and Industry to see what we, as the Govering party can do about them. I will also seek to raise the issue in Parliment once we come back into session.

I will get back to you as soon as I have some further information for you. In the meantime if there is anything else I can help you with please do not hesitate to get in contact with me.

Jim McGovern MP
Dundee West

29 September 2006

Department of Trade and Industry

To: Alan Meale MP

Re: Default and Penalty Charges Levied by Banks

Thank you for your letter dated 5 September to Gordon Brown, enclosing correspondence from your constituent, angeljen, about penalty and default charges levied by banks. I am replying as this matter falls within my portfolio.

I know the whole issue of default charges levied by financial institutions is something that has been attracting increasing attention over recent months. The Office of Fair Trading has been looking at the issue in the context of the level of default charges imposed by the eight leading credit card issuers in July last year to advise them of their provisional conclusion that they are not entitled to recover more in default charges than a reasonable pre-estimate of their costs in dealing with the default, and requested them to change their approach.

The OFT produced a statement of the principles they think card issuers should follow in order to set fair default charges. This is intended to protect consumers from being charged unfair amounts, but also to enable banks to compete vigorously and fairly. the banks were asked to confirm by 31 May their response to this statement and their willingness to make any necessary adjustments to their credit card default charges - the majority almost by half.

As a result of the subsequent reduction in charges across the market, the OFT is satisfied that no further intervention is warrented in this area at this time and that this change has bought about substantial benefits for consumers. The OFT remains of the view that the broad principles do read across to the retail banking area and has decided to undertake further work on the application of these principles to bank current accounts. The fact-finding exercise is expected to take up to March 2007, at which stage the OFT will consider whether a further detailed investigation of the fairness of individual bank default charges is needed.

RT. HON. IAN McCATNEY MP
Minister for Trade, Investment and Foreign Affairs

I wrote my letter to my MP, Derek Wyatt on 21st September & I have just received his reply today.

Many thanks for your letter of 21 September regards this important issue. My apologies for the delay in responding but it arrived whilst I was at the Party Conference and, in the interim, I have been trying to secure an up-to-date profile for you regarding these charges.

To that end, I have rung WHICH? - to establish whether progress is being made with their campaign, and with the matter in general. I am still waiting for the relevant person to call me back.

Clearly, I share your concerns and those of the Consumer Action Group regarding bank and credit card charges. It is good to learn of Mr. Sawar MP's efforts, and I would be very happy if the CAG would like to know of my support.

In the meantime, and because I was not fully up to speed with the current state of play, I asked our specialist Library for a briefing. I enclose a copy herewith, and trust it will be of assistance to you. I am taken aback to learn that the OFT failed to act on the relevant deadline. I have therefore tables a Parliamentary Question asking when the OFT recommendations will come into effect. As soon as I have the answer to hand, I will of course be in touch.

He has attached Standard Note ref: SN/BT/3941 updated 26/6/2006 by Timothy Edmonds, Business & transport section. This document is 9 pages long, includes Bookworm's court bundle , BAG's legal argument & website, OFT announcement, Banks' response & Parliamentary activity. Also attached is Minister Presses 'Go' on Consumer Credit Act 2006 dated 25/5/2006 ref: P/2006/134.

Reply to my Second letter to My Mp

Penalty Charges issued by high street banks

Thank you for your further email to me about this issue. I am impressed by the level of support the campaign has been able to generate. Mohammad Sarwar MP is a close colleague of mine and I will be talking to him to see if there is any way I can help in forwarding the campaign here in Westminster.

Since I last wrote to you I have been trying to pursue this issue in Parliament hoping that this would bring about a quicker answer than a simple letter. In response to a Parliamentry question I laid down on Monday I recieved this response from Ian McCartney, the minister of state in the department of trade and industry.

"The OFT have been looking at the question on penalty charges in respect of credit cards and have stated that they believe such charges had been generally set at a significantly higher level than was considered fair and set a £12 threshold for OFT intervension unless there were exceptional business factors.

The OFT is of the view that the broad principles do read across to the retail banking area and has decided to undertake further work on application of these principles to bank current accounts. This fact-finding excercise is expected to take place between three to six months, at which stage the OFT will consider whether a further detailed investigation of the fairness of individual bank charges is needed."

Whilst this process can be a slow one the fact that the OFT are planning to undertake a full investigation into bank charges can only be a good thing. This is especially the case when they have already expressed the belief that their ruling on credit cards can be read across to bank accounts.

I still await a response from Alistair Darling and will get back to you once I have recieved that response or if any other progress is made.

I hope that the above is of use to you. If there is anything else I can help you with please do not hesitate to get in contact with me.

Yours Sincerely

Jim McGovern MP
Dundee West

It appears my MP, Derek Wyatt, has honoured his promise;

Bank Charges: 12 Oct 2006: Written answers (TheyWorkForYou.com)

Still no reply from Alistair Darling, been waiting since August, I think another letter stating my unhappiness and if he doesn't pull his finger out I will not be voting for him, or do you think a letter to the local paper would be better.

I wrote to my MP on 27th October, and received a response on 31st (quick work!)

Dear Girltuesday

Thank you for your letter of 27th October and I am sorry to learn that you have been caught up in this rather sharp banking practice. I am fairly familiar with the problem because I have been working with BBC journalists on this issue.

My personal view is that, although banks should be entitled to charge a penalty if someone breaches an agreed overdraft limit, I think that the fee charged should simply reflect the cost of the administration of that situation. I do not believe that the banks should charge punitive fees and I believe that it is illegal for them to do so though no one seems to be enforcing the law. As you have found out from your own experience, the banks are seeking to avoid a legal definition of what they can charge by caving in to avoid court action.

I am currently seeking to track down the legal basis for the belief that banks by law are only allowed to charge administrative costs for breaches of bank overdraft agreements.

If it is correct that it is illegal, then I will certainly be pursuing this further with the Treasury because it does seem odd that they might be breaching the law with impunity,

Nonewithstanding that, I also believe that somthing has to be done to make the system that the banks are operating fairer and more reasonable so that they are not simply using this as a money making scheme at the expense of people who, by definition, will be affected financially.

I am grateful to you for raising this subject.

Simon Burns MP

Reply from Andrew Pelling, MP for Central Croydon, received this instant (If you read this, Mr Pelling, I admire you for working on a Sunday evening ):

I could not agree with you more. The public debate is moving against the banks and the report out today from MP's is very critical of the effect on those on low incomes.

Short and sweet. Put a smile on my face, though.